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DATE News (chronologically)
04/16/09
irl
Judge in Castroneves case unhappy with his lawyers
A federal jury on Thursday began its fifth day of deliberations in the Miami tax-evasion trial of Indy 500 champ Helio Castroneves.  The 12-member jury has been struggling with complex legal issues in the government's case against Castroneves, who is charged with failing to pay taxes on $5.5 million earned between 1999 and 2004.

Defense lawyers for Castroneves moved for the mistrial earlier this week after U.S. District Judge Donald Graham clarified his jury instructions on key legal matters. On Wednesday, the judge addressed the defense's concerns by making further changes to his instructions.

The changes dealt with the relationship between Castroneves and Penske Racing, which signed a contract with the Brazilian race car star in late 1999. But his licensing deal was actually between a Panamanian tax shelter and Penske, which is at the center of the prosecution's conspiracy case against Castroneves, his sister and his lawyer.

Graham has expressed frustration with Castroneves' lawyers as they pushed for more changes in the jury instructions. ''We're complicating matters because we keep raising new terms that require definitions,'' the judge said on Wednesday.

Jurors must decide whether Castroneves owed taxes on income from the Penske contract that was supposed to be paid to the Panamanian company, Seven Promotions, in 2000-02, but instead was sent later on to a Dutch entity for a retirement annuity.

If Penske had paid Castroneves through the Panamanian company, the driver would have been required to pay 30 percent in withholding taxes on the $5 million licensing contract under U.S. law.

Castroneves, who owns a Coral Gables mansion, also received $530,000 from a Brazilian trading company that sponsored him just before he hit the big time a decade ago as an IndyCar driver with Penske.  So far, Castroneves has paid taxes on only $50,000 of his earnings from the Brazilian sponsor, Coimex Internacional.

According to the IRS, Castroneves owes $2.3 million in taxes.  Miami Herald

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